A 53-year-old Westminster man was recently sentenced to six years in federal prison for a $1.7 million real estate scheme involving houses in the Broadlands neighborhood in Broomfield.

Steven J. Mascarenas pleaded guilty in July to charges including wire fraud, making a false statement to a pretrial services officer and escape, according to a news release issued Friday morning by the U.S. Attorney’s Office. He also was sentenced to three years on supervised release after he serves his prison term and to pay restitution of $1,776,152.21.

Mascarenas was indicted on April 22, 2010, along with co-defendants, his wife, Kathy Mascarenas, and Katrina Roberts. Roberts pleaded guilty and was sentenced to 20 months in prison on July 27. Kathy Mascarenas pleaded guilty and was sentenced to two years in prison on Nov. 6.

In 2004, Steven Mascarenas, then an attorney and licensed real estate broker, orchestrated the purchase and resale of residential properties in The Broadlands. He arranged to have individuals serve as “credit buyers” to obtain loans, purchase the properties and resell them at inflated prices to other “credit buyers,” according to the news release. He concealed from lenders that the“credit buyers” were acting at his direction and were being compensated after the closings for their participation in having obtained the loans and purchased the properties, the release stated.

Mascarenas had Roberts prepare appraisal reports in which she fraudulently inflated the market values of the properties by $100,000 to $325,000, according to U.S. Attorney’s Office. To make the inflated values in the reports appear legitimate, Roberts falsely represented that the purchases, which were actually sales at market value, were “distressed” sales or “quick” sales below market value, the release stated.

Then, based on the fraudulent appraisals, Steven Mascarenas set the prices for the resales far beyond true market values, and arranged for the buyers to obtain 100 percent financing, according to the release.

Steven Mascarenas also caused false information about buyers’ qualifications to be incorporated into their loan applications, so they would qualify for the loans, the release stated.

All of the loans went into default, and the loss to the lenders was approximately $1,776,162.21.

While out on bond in fall 2011, Steven Mascarenas repeatedly lied to his supervising pretrial services officer, telling him that he was employed making sandwiches at a Quizno’s restaurant. He was actually managing the store under the assumed name of “Steven Jay”, in violation of the conditions of his bond.

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